LAS VEGAS, Jan. 9, 2003 — Smart wristwatches — which display relevant, customized information broadcast across an innovative wide-area wireless network — will be available in the fall of this year, Microsoft Chairman and Chief Software Architect Bill Gates announced yesterday at the 2003 International Consumer Electronics Show (CES). These first
“smart watches,”
to be created by international watchmakers Citizen, Fossil and Suunto, are built on Smart Personal Objects Technology (SPOT), a new technology platform designed to improve the functionality and usefulness of everyday objects.

SPOT watches feature customizable watch face displays.

PressPass asked Bill Mitchell, founder and general manager of the Microsoft Smart Personal Objects Technology group, and Roger Gulrajani , the groups director of marketing, to explain the significance of the announcement. PressPass also spoke to Donald Brewer, vice president for technology for Fossil, and Dan Colliander, president of Suunto, to learn more about their companies’ commitment to developing SPOT-enhanced products.

PressPass: Yesterday, Microsoft unveiled the first products to be based on SPOT, wristwatches from watchmakers Citizen, Fossil and Suunto. Why will watches be the first SPOT products to reach the market?

Mitchell (Microsoft): The SPOT initiative is committed to improving the core function of everyday devices through the addition of software. The initial class of Smart Personal Objects comprises information-receiving devices that provide personalized information that is time, location and context relevant. People are used to looking at their wrists to see what time it is. A SPOT wristwatch simply extends the common user experience of glancing at wristwatches for time to glancing periodically for timely information. Because when you look at a watch, you are actually doing more than simply looking at the time. For instance, if it’s 3:15, that means that youve got 20 minutes until the babysitter has to leave, or if it’s 1:00 p.m. on the West Coast, that means that the New York Stock Exchange has closed and it’s a good time to get a market update. The actual time of day is just one link that leads to a series of informational needs relating to time. With SPOT devices, you have convenient access to channels of timely information that you can use practically in the course of your daily activities.

Gulrajani (Microsoft): We always thought that wristwatches would be the first category of devices built on SPOT technology. When we started to develop SPOT, we looked at product categories and devices to discover where the technology would be most relevant. We looked at who would be the customer base for these kinds of products and we looked at what kind of industry would be willing to accept this technology in a really creative, innovative kind of way. In early meetings with watchmakers, we discovered that the watch industry has the need to reinvent itself cyclically, and that the major revolutions and market opportunities in watch-making had to do with technology. We believed that, by working with watch-makers to create new application scenarios, together we had the opportunity to ignite a change in the way people use watches. Although there are many other categories of devices besides watches that may eventually benefit from SPOT technology, the wristwatch emerged as the first go-to-market opportunity partially because the watch-making industry was really ready for this kind of innovation.

PressPass: What kind of information is available on a Smart Personal Objects Technology-enabled wristwatch? How do they work?

Mitchell (Microsoft): Smart Personal Objects Technology devices are built on a brand new computing platform incubated in Microsoft Research (MSR). Microsoft worked with National Semiconductor to develop a chipset, which consists of an application chip and a tiny radio frequency receiver. The platform has been optimized for low power draw, miniaturization and low cost. To provide connectivity to SPOT devices, Microsoft created DirectBand, a set of radio technologies that enables the transmission of Web-based information to smart objects. DirectBand includes the custom radio receiver chip, a nationwide wide-area network based on FM subcarrier technology and new radio protocols created specifically to meet the unique communication requirements of smart objects.

Content such as news, weather and sports information is broadcast to smart devices as wireless
“channels.”
Subscribers can customize the channels and the information within each channel so they see only the information that is important and relevant to them. They establish their preferences by interacting with a simple SPOT device Web site from their PC. A personalized Web site makes the care and nurturing of multiple smart devices easy and convenient.

PressPass: The first SPOT-enhanced watches are expected to be available in fall 2003. Can you describe what these products will be?

Brewer (Fossil): Fossil will use Smart Personal Objects Technology to produce fashion watches for multiple brands, including Fossil, Abacus and Philippe Stark. Our goal is to take the technology developed by Microsoft and fashionize it, really make it sellable to the broadest set of customers. We are in the process of developing watch designs that incorporate Microsoft technology into successful watch concepts based on our expertise in watch branding and with the fashion industry.

The target demographic for smart watches slants toward 15- to 35-year-olds. Because these watches arent
“geekware,”
but are instead fashionable products that do something valuable, I think the market goes beyond male early adapters and really allows us to go after other major markets.

With technology watch products in the past, form has always been an issue because these watches typically have a large display, which can be hard to make look fashionable. However, retro and sporty looks are popular today, and many of them have larger watch faces. The SPOT watch display is no larger than these, and I believe this is an opportune time for watches that combine this kind of form and function.

Colliander (Suunto): We call all our watch-like products Suunto sports wristops, which perform many functions beyond advanced time-keeping. Suunto ” n” series are a new group of Suunto sports wristops built upon SPOT. Suunto ” n” series devices display not only SPOT-enabled information, but also provide users with monitoring of heart rates, altitude and air pressure. The products ability to monitor heart rate and altitude will appeal to people who are both active in sports and who are
“street-smart”
information users.

We design our products for a unisex audience, but in the past weve had to use large displays on the wrist top to show precise data at a glance. SPOT technology, which supports a 96×120 pixel screen, is great because we get at-a-glance readings in a much smaller screen. Our Suunto ” n” series will be more appealing to a broader audience, including women, because we can make them smaller without sacrificing readability.

PressPass: Can you describe scenarios that show how people will use these new products?

Brewer (Fossil): My favorite example involves a businessman who travels for a living. He lands in New York, and immediately his watch updates itself to the current time, without him having to think about it. Because he has pre-selected a channel for New York weather information, he looks at his watch to find the weather forecast. He doesnt need to get onto his cell phone and spend however long it is to connect to his carrier to find out if its going to rain. He can see that information very quickly on his watch. He can also glances at news, stock closings, sports scores, all the information that he would normally pick up when hes sitting at his laptop in the morning back in the office. However, all this information now appears on his wrist wherever he goes.

Colliander (Suunto): One basic use of a Suunto ” n” series device would be someone doing daily exercise — running, working out at the gym or whatever — and monitoring his heart rate at the same time that he stays alert to news, messages and other information through SPOT. A bit more advanced scenario involves a user starting to personalize virtual training programs. You can combine the SPOT technology with your calendar to create training workouts. If youre into running, you can go onto www.suunto.com and sign up for workout schedules and keep track of your progress with your device. If you are involved in an interval training program, you can preprogram your weight lifting intervals into the device. Note that it will update information as you change cities. So if your home is in Denver and you happen to be working out in Los Angeles, the Suunto ” n” series will adjust for the difference in altitude — just as your heart does.

PressPass: What opportunities does SPOT allow your companies to pursue?

Brewer (Fossil): When you talk about SPOT-enabled watches, its hard not to think of them as Dick Tracy watches. Few people actually remember the 1940s-era futuristic cartoon Dick Tracy, but everyone remembers his watch. Its become an urban legend. Why have so many people remained so fascinated with his watch? I think its because we are at this point of evolutionary leap, where a watch no longer needs to be limited to simply keeping time. People are ready for watches to become a functional technology element so we can eliminate the need to carry around one of the many devices we now stuff in our pockets.

Colliander (Suunto): SPOT was a natural for Suunto because all of our instruments are interconnected through a PC and to the Internet. That means that people can be in touch with, and totally in control of, their information. With SPOT, our devices can be customized and personalized to reflect the needs or interests of just about everybody.

With the sports-related products that we have designed up till now, we dont care if people wear something else during the day, then put their Suunto on when they do their sports. With SPOT, we can design a wrist top with a look and a set of features that makes it attractive for wearing all the time.

PressPass: Microsoft has frequently worked with Original Equipment Manufacturers (OEMs) in the past to design and build products. How would you characterize Microsofts relationships with its watch-making partners?

Mitchell (Microsoft): Watches arent like PCs, where you buy software from one company, hardware from another and services from yet another. PC platforms are usually built for open integration with other systems. But watches are different, both from a fashion and a technology standpoint. The hardware and the software need to be so tightly integrated that its almost inconceivable to have the two developed in a disjointed fashion. We had to be certain that the companies that we partnered with shared the same philosophy and worked very closely with us.

Weve been very fortunate to have had the opportunity to work with such synergistic partners. When we first met with Suunto, for example, we had this amazing meeting of minds. Some of the ideas they had for user interface, sensor technology and the use of radio frequency technology were very similar to ours. And they already had pioneered wrist-instruments with larger dot-addressable LCDs as well. It was just a natural fit. With Citizen, we had a similar experience. In fact, the visions were even more closely aligned. Mr. Umehara, Citizens president, showed us a video presentation that outlined his vision for future timepieces. The video was amazingly similar to the first focus group vision video we produced to consumer-test SPOT-based watch technology. Fossil, too, was also looking for a way to incorporate more technology into their fashion products. They had been experimenting with niche technology products already, but when we came to them and showed them a broad spectrum technology that made sense, they recognized the opportunity immediately.

PressPass: As development partners, how would you characterize your experience working with Microsoft and the SPOT platform?

Brewer (Fossil) : Its a great opportunity. Its a unique first for a real fashion company to work with a top-notch technology company. SPOT itself has been very easy for our developers to use, as its the cutting edge of Microsofts development environments. What we are developing is definitely a new form factor, a connected device that keeps time and resides on your wrist. I think it represents the evolution of watch technology, and I think SPOT is what will drive the evolution.

Colliander (Suunto): SPOT consumes relatively low power and is available at a relatively low cost. It doesnt tie you into a form factor or a set technology platform. You can put it into all sorts of things, and have it do what you want, or you can easily customize it for your needs. So its an enabler, and it doesnt define how you have to do something.

The people at Microsoft have been great to work with. While we are a small and very specialized company, my biggest worry was being loved to death by Microsoft. I was concerned about being inundated by communication, information and bureaucracy. Instead, there was an openness, an entrepreneurial attitude and a desire to make things happen. If you have two companies that know what they are, what they are doing and where they want to go, they can do great work together.

PressPass: What applications of SPOT will we see next?

Mitchell (Microsoft): We have talked about a number of other everyday objects whose base function and usefulness could be improved through the addition of software. These include refrigerator magnet displays that provide glanceable information about time, weather, calendar information and other kinds of alerts. Key chains and key fobs could be enhanced with SPOT to make them all-purpose security devices that provide secure access to everything from your home, car, office to your computer. Stores could develop buttons to give to customers that provide up-to-the-second information about special sales or promotions. However, its important to remember that the goal of SPOT is not to create new devices but to take devices that have a proven usefulness and make them more functional. Its also important to remember that in the future, SPOT devices will not just be isolated displays of information. We foresee a time when SPOT devices, PCs and other computing devices will interact with each other seamlessly, each serving in roles that will make peoples lives less complicated, more productive and more enjoyable.